WASHINGTON — The United States launched an economic counterattack Friday in its high-stakes standoff with Iran — a modest response likely owing to the lack of American casualties in Iranian missile strikes and the crash of an airliner allegedly shot down outside Tehran, but yet another wedge in the relationship between the West and a global pariah known for harbouring dangerous ambitions.
Secretary of State Mike Pompeo and Treasury Secretary Steve Mnuchin announced an array of fresh sanctions against eight senior security and military officials in Iran, as well as several of the country's industries, including textiles, manufacturing, mining and the steel and iron sectors.
Pompeo made a point of contrasting President Donald Trump's approach with that of the Obama administration, which he accused of opening up "revenue streams for Iran" — a reference to the previous government's easing of sanctions as part of the international 2014 deal aimed at curbing the country's nuclear ambitions.
"Under our administration, oil revenues are down by 80 per cent and Iran cannot access roughly 90 per cent of its foreign-currency reserves," Pompeo said. Iran's own president, Hassan Rouhani, recently conceded the country has lost more than US$200 billion in foreign income and investment, he added.
"As long as Iran’s outlaw ways continue, we will continue to impose sanctions."
Iran has been a target of American sanctions for more than 40 years, but Mnuchin shrugged off the suggestion they have in fact fostered unrest, such as the embassy protest in Baghdad and the killing of a U.S. contractor — two events widely seen as sparking the latest tensions.
"If we didn't have these sanctions in place, literally Iran would have tens of billions of dollars. They would be using that for terrorist activities throughout the region and to enable them to do more bad things," he said.
"There’s no question, by cutting off the economics to the region, we are having an impact."
Precisely what sort of impact is the question, said Brett Bruen, the White House director of global engagement during the final years of the Obama administration.
"It's not that applying pressure is in and of itself a problematic strategy, but applying pressure without having a path forward is what gets us into the kinds of situations we saw over the last couple of weeks," Bruen said.
Pompeo also publicly said for the first time Friday that it was likely an Iranian missile, fired in the aftermath of Iran's attack on two Iraqi military bases where U.S. soldiers are stationed, that downed Ukraine International Airlines Flight 752 early Wednesday.
The Boeing 737-800 was carrying 176 people — 138 of them bound for a connecting flight to Toronto — when it crashed in a fireball shortly after taking off from Tehran.
Democrats and Republicans on Capitol Hill have spent the week seized with the question of whether Trump was justified in taking out Iranian Gen. Qassem Soleimani, a drastic step that instantly triggered a tidal wave of fury across the Middle East and put the U.S. and Iran on a war footing.
The plane crash has dragged Canada into the fray, creating for Prime Minister Justin Trudeau another trilateral diplomatic crisis of the Trump administration's making and prompting questions about whether the U.S. president himself should bear some of the responsibility for the tragedy.
"I personally don't believe — as much as I disagree with the president on so many things that he's done — I don't believe the president is responsible," said Bruce Heyman, who was the U.S. ambassador to Canada under Barack Obama.
"What has transpired, though, is the fog of war — the anxieties of being on a knife's edge that create miscalculations and unintended consequences that take place. I believe the escalation has resulted in just that."
Assuming the allegations of a missile strike prove true, the responsibility for the tragedy rests squarely with the Iranians, Heyman added, and Canada must first focus on ensuring the families of the victims can properly grieve their losses.
"The complications for Canada right now are making sure that, first and foremost, the families can get the remains and can deal with the grieving," he said. "Second, they have to parallel this and get an investigation, a credible investigation that will result in understanding what happened and why."
That could prove complicated, given Iran's lack of standing in the global diplomatic community. The former Harper government severed ties with the country in 2012.
"The rest of the world needs to stand up and take a more assertive role in resolving the crisis," Bruen said.
"Justin Trudeau has a unique moment here where he can — and he should — look at how to guide both Iran and the United States from the brink of crisis, and that something good should come of this tragedy before there is, quite frankly, another tragedy."
The lack of a diplomatic relationship would make it impossible for Canada to play any sort of role as mediator, but the tragedy could prove to be a starting point for renewed ties, said Jeremy Wildeman, a Middle East policy analyst and visiting scholar at the University of Ottawa.
"This might highlight that need for Canada, no matter what they think of the Iranian government, to have at least dialogue and open diplomatic representation between the two countries," Wildeman said.
That way, "they can know what's going on in Iran, they can talk to the Iranian government and they can serve the many, many, many Canadians who are of Iranian heritage, and Canadians who visit there."
Trudeau's Liberal government is no stranger to being caught in a diplomatic tug of war.
In December 2018, Canadian authorities in Vancouver detained tech scion Meng Wanzhou, the chief financial officer of Chinese communications giant Huawei and the daughter of the company's founder, in response to an extradition request from the U.S. Department of Justice.
Weeks later, China detained two Canadians, Michael Kovrig and Michael Spavor, in what has widely been seen as an act of retribution. They have been held ever since.
This report by The Canadian Press was first published Jan. 10, 2020.
— Follow James McCarten on Twitter @CdnPressStyle